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vince cable tuition fees will force middle class students to live with their parents

access_time October 13, 2010 chat_bubble_outline 0 comments
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By
Jason Groves and Laura Clark
Last updated at 10:27 AM on 13th October 2010

Shake up: Business Secretary Vince Cable suggested that middle-class students should stay at home while completing their degrees

Shake up: Business Secretary Vince Cable suggested that middle-class students should stay at home while completing their degrees

Vince Cable last night signalled an end to the middle-class dream of leaving home to go to university.

The Business Secretary suggested those struggling to pay higher bills after the biggest shake-up of university funding for half a century should cut costs by staying with their parents during their studies.

He spoke out as it became clear the middle classes would end up paying more than both the rich and the poor under the radical reforms.

Mr Cable, who admitted he benefited from a free university education, told MPs: ‘It is quite possible, and indeed desirable, that we could move to a more sensible system where many students study in their home towns.’

His comments came as Lord Browne’s blueprint for the future of higher education faced a backlash over its impact on the so called ‘squeezed middle classes’ – already reeling from the prospect of losing child benefit payments in 2013.

The former BP boss’s proposals could become law by 2012.

But they face a rough Commons ride from angry Liberal Democrats who campaigned on a pledge to vote against any increases in fees. The report recommends:

  • The abolition of an annual £3,290-a-year fee limit;
  • Universities should be able to charge up to £12,000 a year – keeping all income from the first £6,000 and a share of the remainder;
  • Graduates to repay loans once their income reaches £21,000-a-year, not £15,000 as at present;
  • A new ‘real’ rate of interest charged on loans – inflation plus 2.2 per cent
Angry: Students at the University of Birmingham protest today over proposals for students to pay thousands more for their degrees

Angry: Students at the University of Birmingham protest today over proposals for students to pay thousands more for their degrees

But analysts claimed the richest
graduates would pay back less than middle-income earners, who would end
up paying more interest because they will take longer to pay off their
loans.

Affluent students could save themselves £12,000 in interest by paying off their loans straight away, while graduates with average lifetime earnings of £27,000 would repay the most, according to the Social Market Foundation. 

Mr Cable seeks to redress this by imposing an early repayment charge – similar to a fee paid to a bank if a mortgage is redeemed before the end of the deal.

But Ian Mulheirn, SMF director, said: ‘Our analysis shows that students who can access the Bank of Mum and Dad effectively get a £12,000 discount on the cost of their degree over their lifetimes compared to a middle-earning graduate.’

Mr Cable also hinted that the ‘generous’ system of maintenance loans and grants would face cuts following next week’s Government spending review.

And he lifted the lid on a Cabinet
row over whether to allow leading universities to charge as much as
£12,000-a-year. David Cameron is said to favour the move.

But Mr Cable admitted it risked making the leading universities the preserve of the wealthy. 

In an attempt to head off a row with his Lib Dem colleagues, he suggested yesterday that fees should be capped at £7,000.

Meanwhile,
direct state funding for most arts and humanities degrees would be
scrapped in an overall 80 per cent cut to university teaching budgets,
with only essential subjects, including science and engineering,
benefiting from government cash.

Sally
Hunt, general secretary of the University and College Union, said the
proposals represented the ‘final nail in the coffin for affordable
higher education’.

Mr Cable insisted the highest-earning third of graduates would eventually pay back twice the amount paid by the lowest third.

I’m terrified about my son’s debts

Melanie Rawlinson and her husband Keith Bennett already have two sons at university, each facing debts on graduation of £25,000.

They are now adjusting to the realisation that their third son Michael, who hopes to go to university in 2013, could face a far greater burden.

With fees possibly rising to £12,000 a year, he could face debts of more than £40,000.

Third time unlucky: Melanie Rawlinson and her 15-year-old son Michael are facing up to a far greater burden than Michael's two older brothers currently face

Third time unlucky: Melanie Rawlinson and her 15-year-old son Michael are facing up to a far greater burden than Michael’s two older brothers currently face

Miss Rawlinson, a secondary school teacher from Croxley Green, Hertfordshire, said: ‘My 15-year-old is concerned about having £6,000 a year fees or even more.

‘He has expressed concerns already, saying he doesn’t know if he’ll be able to go to university, but he is a capable child who should go.

‘I worry about him starting life in that sort of debt. Not every job that requires a degree is a well-paid job.’

The couple, whose combined income is around £75,000-a year, already support their two eldest sons.

Matthew, 22, is studying for a masters in chemistry at Bristol University, while Tom, 20, is in his second year studying graphic design at the University of the West of England.

‘During term we pay both boys £70 a week for their food, clothing and bills,’ said Miss Rawlinson.

‘We’re not starving, but we are having to cut back. People didn’t envisage they would need to make such a provision for their children’s education.’

Her elder sons both work in the holidays.

We can only afford to help on of our daughters study

With one daughter already at university and another planning to go soon, Mike Wilkinson is all too aware of the financial pressures they could face after graduation.

He fears the rise in university fees will prove unaffordable for many middle-class parents.

Mr Wilkinson, 52, a technical services manager, already struggles to help his first daugher, Laura, 19, as she studies for a degree in criminology and psychology degree at Keele University.

Uncertain future: Laura and Hollie Wilkinson with their mother Janet. Their father Mike already struggles to pay Laura's fees and fears the rise will make university unaffordable

Uncertain future: Laura and Hollie Wilkinson with their mother Janet. Their father Mike already struggles to pay Laura’s fees and fears the rise will make university unaffordable

But with Hollie, 14, drawing up plans on what she might study he feels the financial strain could be enormous.

He said: ‘It’s something we have spoken about as a family and we have to give Hollie all the facts and ask her: “Can you afford to go?”. If fees were higher, we’d have to say to her, ‘You’re on your own’ and I think she wouldn’t go for it.’

‘She has set her heart on studying in the field of graphic design and we would not stand in her way but she has to be aware of the financial implications.’

Mr Wilkinson, pictured, lives with his wife, Janet, 51, in Lancaster. He earns just under £40,000 a year and is the family’s sole breadwinner.

Putting two children through university would severely dent their finances.

And he fears the rise in tuition fees may hit middle-income families worse than any other income group in Britain.

He said: ‘Poorer families are not eligible for full grants and bursaries to help with costs while the rich can afford to pay – it is the middle-income families that will struggle most.

‘It won’t radically affect my oldest daughter but by the time Hollie is wanting to go on to further education it will. Maybe she would have to compromise by finding a degree course in Lancaster so that she could live at home and save money.

‘She may also have to consider the subject she is studying and be forced to choose a subject that has the potential to bring in a more lucrative wage.’

He added: ‘I believe in paying my
way and my children are almost penalised because of it and it just
doesn’t seem fair. It’s because we’re in the middle.’

Laura,
19, pays more than £3,000 a year to study at Keele University and her
entire degree will have cost around £9,750 by the time she graduates. 

Mr Wilkinson does not directly contribute to his daughter’s tuition fees but helps her out with living costs at home.

Lib Dems call on Cable to quit over ‘betrayal’

A senior Liberal Democrat last night called on Vince Cable to resign – as his U-turn over a pledge to scrap tuition fees plunged the party into turmoil.

Former frontbencher Baroness Jenny Tonge said Business Secretary Mr Cable, party leader Nick Clegg and other Lib Dem ministers should quit the Government rather than force through higher tuition fees months after signing a pledge to abolish them.

‘Those Lib Dem ministers who signed the pledge should resign rather than betray their own principles,’ she said.

Mr Cable was forced into a humiliating climbdown in the Commons over the party’s pledge to scrap tuition fees, which was a central plank in their election campaign and which still featured on their website last night.

Challenged over the U-turn, Mr Cable said the dire public finances meant it was no longer possible to stick to a pledge the party’s MPs made in April. In an extraordinary defence, he went on: ‘The road to Westminster is covered in the skidmarks of political parties changing direction.’

Lib Dem backbenchers indicated that they would back a rebellion against the decision to increase tuition fees. Under the coalition agreement, Lib Dem MPs can abstain in any tuition fees vote.

The party’s deputy leader, Simon Hughes, said raising fees could ‘discourage millions from going to university because of the risk of significant debt at the start of their working lives’.

He added that yesterday’s proposals were ‘not the final word’ on the issue.

Tim Farron, a candidate for the Lib Dem presidency, said he would vote against the increase in tuition fees.

Lib Dem MP Greg Mulholland told Mr Cable the proposal to more than double fees was ‘a compromise that some people cannot and will not accept’.

The party’s former higher education spokesman Stephen Williams said rebels believed they had the numbers to vote the Government down.

Mr Cable’s U-turn has also prompted anger among party activists.

Sara Bedford, a former chairman of the Lib Dems’ youth wing, said the party was in danger of becoming the ‘battered wives of British politics – going back for more time after time’.

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Personally, I feel that certain degrees should be ring-fenced (i.e. no fees to be paid). These would be the degrees that are required to get you into an essential profession (such as medicine). Will a typical working class kid with dreams of becoming a doctor want to accrue 5 years of debt?

One thing that we should remember though is that most degrees are anything but intensive. I remember the jokes when I was at university about the people who had 4 hours a week of lectures. There is no reason why these students can’t have a part time job and work in their ample holidays, which would make a huge impact on their debts. I know a number of students in America who, depsite having wealthy parent and a far more intense study schedule than typical British uni students, also work 2 jobs to cover costs.

– David S, Croydon, England, 13/10/2010 13:37

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Liz M, London, 13/10/2010 13:06

I don’t wish to pay for the making of your children, Liz. If that’s what you want for them then pay for it. Like lots of parents who pay for their kids to go to private schools, cough up for uni and stop whingeing. If you don’t think university is going to result in a job that’s well paid enough to cover the costs then don’t go. It’s so simple.

– MarkS, Bath, 13/10/2010 13:34

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How about, shock horror, living at home AND working, full time in the holidays, like I did? We aren’t all pampered little princes and princesses you know.

– Katie, bristol, 13/10/2010 13:27

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oh fer heck’s sake… things have changed, the country is bust and you are going to have to get used to either financing yourself through Uni via a student loan or else having a trust fund set up for the purpose like the Americans have been doing for ages now. This is just a changeover period… and people are going to have to wake up to the fact that if you want your children to go through Uni, then you are going to have to start saving to put them through it.

Student loans should only be there as a fall-back for those who are bright but haven’t got parents who can do the saving or don’t qualify for a scholarship to cover the costs.

– paul cooke, gloucester england, 13/10/2010 13:20

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as a former student, and now lecturer and researcher i would say that browne’s suggestions will damage our university culture and system beyond repair. already those from wealthy families pay off the accommodation costs and tuition fees of their offspring early, making the debt of university life easier to deal with afterwards. those who end up in more poorly paid jobs will always have this debt overhanging them, and with housing unaffordable to many young people – apart from the wealthy – many will never be able to buy a house with more debt to pay off. moreover, courses with no “obvious” economic value – but huge social and cultural value – will cease to exist. in my own speciality of the social sciences which studies the politics of health and medicine so patients are not harmed, such subjects will be biased in favour of the “harder” scientific subjects which are seen to have more obvious economic and practical value. the checks and balances will be removed.

– Dr Johns, London UK, 13/10/2010 13:14

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Part of university is going away and living away. I know with my children it was the making of them. they also learnt to be independent ie renting etc. but with friends to help them. I am just glad that both my girls have now left home, are independent, have paid back their student loans.

Under the new system we would not have been able to afford to let them go. As it is it has taken my youngest over 10 years to pay off her student loan and that has included us giving her the money as a wedding present to pay off the remainder of her loan otherwise we do not know how long it would have taken her. Decades as she only had a small student loan in the first place.

This will mean that the poor will be subsidised to go and the rich will be able to afford to. It will once again be the middle classes who will suffer. but this appears to happen with any government now. No one stands up for the hardworking middle class taxpayers.

– Liz M, London, 13/10/2010 13:06

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